Amy Wachtel Delman has been involved in public relations, marketing, and branding for over two decades. Her expertise lies in using media exposure to raise awareness and increase revenues in companies where she has worked in-house or as a consultant. She has been mentioned in Inc. magazine and the National Journal of Public Relations.
Congratulations to our client, Monica Kaden, MBA ASA, Principal, Fischer Barr & Wissinger LLC, on her wonderful article.
The State of Medicine on the Provider Side
Author: Monica Kaden, MBA, ASA
The control of physician costs (their compensation) must be balanced by fairness and our country’s long-term objective of keeping smart, motivated students going into medicine and keeping our valuable physicians still working and in the belief that medicine is still a good career.
Let’s take a look at pros and cons health care reform offers for doctors, future medical students and hospitals.
This is a very challenging time for physicians for many reasons. Reimbursements are declining for physicians and there is uncertainty regarding future reimbursement. Medical practice costs are increasing.
There is more regulation and oversight by insurance companies and Medicare regarding coding and billing. New electronic health record requirements are expensive and time consuming. Physicians and staff must be trained on how to use these new systems. Coding is changing next year from ICD-9 to ICD-10, which will change coding and billing for physicians. This could pose temporary glitches in practices’ cash flow cycle. Physicians must keep up with new regulatory requirements such as HIPAA.
There is uncertainty regarding new accountable care organizations (ACOs) that have been formed and whether there is an actual benefit to ACOs. As of this writing, just a few of these organizations realized reported cost savings. It is questionable if the financial objectives of ACOs will be achieved. There is uncertainty as to whether bundled payments for an episode of care will benefit physicians. Insurance plans are creating their own networks for the exchanges, and deciding which physicians they want to invite to be in their exchange plan. They only want providers who have proven to be low cost. Again, this is out of the providers’ control.
Plus, there is significant acquisition activity. Practice management companies are buying up smaller medical practices (as are hospitals) and physicians are losing autonomy and the ability to control their own destinies. Initially, the compensation offered may be higher than historical, but that may be a short-term benefit.
Health care reform is changing compensation from volume-based, fee-for-service care, to quality-based care and reimbursement. Physicians can see reimbursement rates decline if the insurance company or Medicare decides that quality care was not provided. For hospitals, a new quality measure is the readmission of patients within 30 days. Hospitals’ are getting penalized with reduced payments due to readmissions.
For all of the aforementioned reasons, it is a difficult time for physicians to be in independent practice or practice at all. There is genuine concern regarding reimbursement and how the medical profession is changing. Reviewing compensation for physicians in many specialties, I believe overall compensation is still good relative to other professions. But for how long is the question.
I do believe in economies of scale for physicians and promoting more groups that can enjoy synergies and saved costs. However, I do think that physicians considering employment should give serious thought to what the culture will be going forward, and whether they are prepared to be an employee versus a part of management. In most cases, there is a financial incentive to becoming an employee; however, the jury is still out whether the financial incentive is short- or long-term. In many situations, physician compensation is revisited a few years after the acquisition and compensation could be adjusted downward, perhaps substantially, based on reimbursement rates, productivity change or other factors.
Certainly primary care physicians have suffered from reduced compensation. The investment of money and time in their education and post-graduate training is not yielding the return that it should due to reimbursement reductions to primary care physicians. Health care reform developers recognize this and have tried to implement some changes (loan forgiveness, reimbursement for Medicaid at Medicare levels, etc.).
Future medical students
We are not a socialist society and many still believe that physicians should not be financially capped. And while it hasn’t happened yet, we are moving in that direction.
Physicians should have opportunities, like every other profession, to work hard and be fairly compensated. I believe this is essential in order to keep smart, motivated young people interested in pursuing a medical career. It is imperative to keep compensation fair for physicians due to all the years of education and post-graduate training, the expense of medical school and the opportunity cost of lost earnings during years of post-graduate training.
As a society, is it in our best interest to encourage smart, motivated students to become investment bankers, lawyers or businesspeople instead of physicians because the earning prospects of a physician are low and capped? We should recognize that this is now happening.
Many hospital providers are experiencing reductions or relatively flat reimbursement from Medicare, Medicaid and commercial payers. Additionally, health care reform is insisting on more attention to “quality metrics” that can be used to reduce reimbursement if it is determined that the provider did not meet the quality metric.
Providers are also experiencing increasing costs due to inflation. Hospitals are labor intensive and have high fixed costs. Also, hospitals must utilize the Medicare accepted system of accounting, Step-Down accounting, a system that is challenging for hospital managers to use to make decisions regarding profitability and cost cutting.
With all these factors, it is not surprising that many hospitals struggle to remain financially viable. Some hospitals are successful, which may be due to very skilled management, the population they service, or having certain profitable lines of business that help sustain the hospital. With more bundled payments, additional penalties due to patient readmissions, more highly paid physician employees, and certain subsidies to hospitals being cut, maintaining hospital profitability is extremely challenging.
Many hospitals are trying to grow their integrated networks with physicians and employment agreements usually reflect higher compensations for newly hired physicians as compared to their income in private practice. Higher compensation is the incentive to get the physicians to join. The issue is the hospital’s cost structure is increased. If and when hospitals are forced to lower their employee physicians’ compensation due to changes in reimbursement, there will be an exit of employed physicians.
Uncertainty in health care reform and significant provider risk
Lots of numbers have been published regarding the number of additional uninsured who will join the state health care exchanges. This could provide an upside for physicians, as there will be more insured patients and less self-paying patients, who many times do not pay their bills. However, it is too early in health care reform to know how successful the health care exchanges will be. At this moment, sign-up is still occurring.
Health care reform could be very good for our country in terms of promoting better health and well-being, having more people insured, protecting patients from insurance companies who don’t want to cover pre-existing conditions or older children, etc. Moreover, insurance companies are becoming more accountable for the premiums they charge and their level of profits.
As discussed, greater regulation and audits, insistence on electronic health records, joining accountable care organizations (if a physician can), accepting bundled payments (because they have to), Medicare threatening to reduce reimbursement yearly with the sustainable growth rate, rising costs, the importance of good education (which is expensive), years of training and the opportunity cost of lost time in the work force due to training will discourage the best and brightest from choosing the practice of medicine as a career. If so, the intended benefits of available, quality health care will not be realized.
Monica Kaden is an accredited senior appraiser (ASA) with the American Society of Appraisers. She specializes in valuations of medical practices and groups, typically for matrimonial and shareholder litigation cases, estate and gift tax valuations, selling and buying business interests, and mergers and acquisitions.
Author: Monica Kaden, MBA, ASA
-Why Frugal Is The New Sexy -
Fairfield, New Jersey – Brenda Hendrickson, CSA, author of How To Be A Frugal Millionaire: Eight Simple Steps to Creating Personal Wealth, recently spoke with WGLS radio. Brenda discussed the following tips:
- Turn a negative money attitude into a positive, money-making attitude
- Make the highly effective habits of a frugal millionaire your own
- Implement simple, yet powerful strategies anyone can practice
- Create the next generation of frugal millionaires
Brenda is a published author, a tax specialist, a Quick Books pro, an advisor, the owner of an accounting firm and a certified senior advisor (CSA) with a Certificate in Financial Planning. Since the book was first published, Brenda has held numerous book signings and is a keynote speaker at organizations, associations and colleges. She has received testimonials on how her strategies have enabled her readership to accumulate wealth.
The CSA designation was created to meet a unique need in the marketplace – knowledge about the health, social and financial issues of aging that are important to the majority of seniors, so that professionals who serve seniors can do so in a more competent, ethical and effective manner.
Public relations plays a significant role in most businesses. Big businesses have many departments helping the company run including a public relations department. Although the bigger corporations need public relations assistance, what about the smaller businesses? Brenda Hendrickson is the owner of Brenda Hendrickson, CSA and the author of How To Be a Frugal Millionaire. She was able to shed light about the importance of public relations on small businesses.
“I have a business. I do my advertising. I do my marketing. I do my networking. We are doing OK. Why do I need a public relations firm?” Brenda asks. She continues to explain, “This can be the scenario of many business owners. They want their business to go to the next level and they believe they have done all they can. Wrong. A public relations specialist is an integral part to the growth of your company.” Small businesses require the same amount of support, if not more, from public relations specialists as big businesses do in order to grow and to become successful.
Brenda goes into detail about business owners in general:
“Business owners must realize that they cannot do all functions of their businesses on their own. They need to recognize their strong points and hire outside professionals to handle the rest.”
It is important to seek the help that will benefit the company. Sometimes having a speaking opportunity or a page in a magazine dedicated to the company is extremely helpful. Knowing a variety of media contacts and understanding which publication is best for the client is what public relations specialists do to help businesses achieve its goals.”
The author has personal experience when it comes to reaching out to receive publicity. She explains her needs for her book: “My new venture needed more than what I was doing in order to reach a regional and national base.” In order to allow her book to be successful and known, Brenda needed an extra set of hands to create media goals. Sometimes personal goals are not able to be fulfilled singlehandedly. Also, sometimes having a smaller business does not mean the owner can and should do everything by his or herself.
Brenda reached out to Amy Delman Public Relations, LLC for the extra set of hands she was looking for. “She spent a lot of time getting to know me, my business, and my goals. She structured a plan that coincided with these goals. A couple of weeks later she was able to make connections I could never have done on my own – a broadcast interview and possible magazine column.” The author could not be more pleased with the outcome of having a public relations specialist promoting her book and guiding everything in the right direction.
Public relations has a huge impact on businesses. It is a strategic adjunct to running a business and it shouldn’t be over looked, no matter the size of the business.
How can you use public relations in your business to reach the next level? Please feel free to e-mail me at email@example.com with any comments or suggestions.
This post was written by Megan Catanzaro for Amy Delman Public Relations, LLC. Megan can be contacted at firstname.lastname@example.org.